Asia-Pacific Markets Mixed as Traders Weigh Fed’s Message

24/06/2021 Asian stock markets wobble on Thursday after Wall Street moved in narrow ranges as traders digested commentary from Federal Reserve officials on the outlook for stimulus. Robert Kaplan, Dallas Fed President, who pencilled in a rate hike next year, said the economy will likely meet the Fed’s threshold for tapering asset purchases sooner than people think. His Atlanta counterpart said the central bank could decide to slow such purchases in the next few months. Stock were little changed in Japan and Hong Kong, retreated in China and Australia. A rally in Tesla helped the Nasdaq Composite eke out another record. Treasuries pulled back.

Gasoline inventories in the U.S. unexpectedly fell last week. Chinese stockpiles have also shrunk to the lowest this year, according to data provider Kayrros. U.S. WTI steady around $73/barrel, while Brent is up 10 cents to $75.28 this morning. Gold erased gains, on the backfoot 0.21% 9at $1774.90, as the dollar pared losses after the U.S. released data that revealed potential cracks in the economic recovery.

Here are some events to watch this week:
• Bank of England interest rate decision Thursday
• The Fed releases Thursday the results of stress tests on the largest U.S. banks
• U.S. wholesale inventories, initial jobless claims, GDP, durable goods due Thursday
• U.S. personal income/spending, University of Michigan sentiment on Friday

The JSE gainned 0.41% to 65,819.63 points and the Top-40 0.45%. Precious metals rose 3.08%, resources 1.73%, banks 0.70% and financials 0.32%. The local bourse broke a five-day losing streak, with metals leading the gains on the day. Royal Bafokeng Platinum led the gains in its sector, up 6.44% to R103.99, Anglo American Platinum added 4.71% to R1,601.49, Sibanye-Stillwater 3.73% to R60.70, Impala Platinum 3.41% to R239.95. Old Mutual will hand investors roughly 62-million Nedbank shares, or about 12%, worth R10.4bn based on the bank’s closing price on Wednesday. That will cut its holding in Nedbank to just over 7%. The deal comes three years after Old Mutual sold down its more than 50% stake in Nedbank, to disentangle its costly conglomerate structure. Top-40 futures currently indicating a weaker start at the opening bell, -114points below the watermark on IG markets. Tencent marginally off 0.09% in Hong Kong.

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European technology stocks jumped on Wednesday, taking cue from U.S. peers overnight, while the pan-European STOXX 600 hovered below record highs as investors awaited business activity data from across the euro zone.
The benchmark STOXX 600 was up 0.2%, while the technology index rose 0.6% and was among the biggest sectoral gainers. London stocks fell back into the red in late trading on Wednesday, after a session which saw investors digesting the latest reading on the UK services and manufacturing sectors. The services business activity index was 61.7, compared to 62.9 in May, while the manufacturing PMI printed at 64.2 against May’s 65.6. At the close trading, the FTSE100 retreated 0.22%, CAC-40 giving 0.91%, alongside the DAX closing the day 1.15% weaker.

Wall Street stocks put on a mixed performance on Wednesday, with the Nasdaq seeing out the session at yet another fresh record high. At the close, the Dow was down 0.21%, while the S&P 500 was 0.11% weaker and the Nasdaq Composite closed out the session 0.13% stronger at 14,271.73. Fannie Mae and Freddie Mac tumbled as the Supreme Court dealt a punishing blow to investors in their challenge to the U.S. collection of more than $100 billion in profits from the government-sponsored enterprises. Sales of new U.S. homes dropped unexpectedly in May as elevated home prices continue to weigh on affordability and builders rush to replenish inventory. All three main benchmark futures indices are 0.25%, at least, in the green.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.11%. China shares lower on Thursday, dragged down by losses in the healthcare sector as drugmakers retreated on concerns over a plunge in medicine prices. The CSI300 index fell 0.19%, while the Shanghai Composite Index lost 0.21%. Japan’s Nikkei on the backfoot 0.08%, while Hang Seng notched up 0.08% – propped up by the healthcare and IT sector both up 0.25%.